How to Buy the Best Life Insurance in 7 Easy Steps [Guide]

Ever wonder what it’s like to go through the LONG process of researching and selecting a life insurance policy?

I highly recommend you get life insurance, but I don’t necessarily wish the buying process upon you.

It can be tough to navigate.

That’s why today I’m going to share the steps you need to complete while searching for and buying life insurance.

I’ll share my experience with buying my own term policy as well. This includes:

getting the life insurance quote,

selecting the insurance company,

taking medical exams,

filling out applications, and

a lot of waiting.

Hopefully this quick guide will give you the confidence to take the steps to protect your family.

Step 1: Research the Type and Amount of Life Insurance to Buy

The last thing you want to do is go into the buying process without doing your own research.

You need to understand the particular type of life insurance product to buy. And you’ll need to decide how much coverage to sign up for.

I’m not going to go into those decisions here because I’ve explained them in prior life insurance related posts. But I will tell you that making those decisions is easy once you understand the different options.

And unless you have a particularly rare family situation, you don’t need an insurance salesman to tell you what type or how much to get. While I’m sure there are some very helpful, honest insurance salesmen, you don’t really need them with the wealth of free information available to you on the subject, and the online services / company portals that can help you find the best price.

Step 2: Request a Life Insurance Quote Online

Once you know what you need to buy, you can begin to shop around. As with any major purchase it’s good to shop around and try and find the best deal you can. Here are some options for where to shop:

PolicyGenius – This is a life insurance comparison site that I highly recommend. If you search for term life insurance with PolicyGenius you will get free quotes in real-time from dozens of life insurance companies. Get a quote from PolicyGenius.

Use a Life Insurance Broker – Insurance brokers are usually paid by the insurance companies to bring you in, so there’s no extra cost applied to you. A broker is going to have access to different insurance companies’ policies and rates. Therefore, they can help you find the best price.

Straight to the Insurance Company – If you already have auto or home insurance with the likes of an Allstate or State Farm, you should see what they can offer in the way of life insurance and a combined policy discount.

Consider Your Employer – If you work for a big company, odds are they already have you set up with a life insurance policy with a minimal amount of coverage. They also will usually offer more coverage at reasonable prices. You definitely need to compare these prices to see if it makes sense to just buy more from them.

People with current health issues should especially consider this insurance because your company is likely not going to require a health exam or deny you because of previous health issues. Keep in mind that you need to make sure that the policy can be converted to your own term life insurance policy in the event you leave the company.

Back when I purchased my policy there wasn’t a PolicyGenius to use. So requested quotes with Zander insurance (the Dave Ramsey endorsed insurance broker), Allstate (my home’s insurer), and ING (now Voya), who just recently started offering insurance through newly acquired ReliaStar. I also checked out my employer options. The quoting process took only a day.

Step 3: Pick a Highly Rated Life Insurance Company

After you get your quote information, don’t rely on price alone to make the decision. I feel safe saying that you wouldn’t want to go with an insurer with a rating less than A. You might also consider doing some general searching online for any issues/complaints with the particular insurer.

I ended up picking ING (ReliaStar). They had the best price, good service, and a good enough rating. Plus, I already have a comfortable relationship with ING’s online banking product.

Step 4: Get a Life Insurance Health Exam

Once you decide on a company, they’ll want you to complete a health exam. They will cover this expense, but you’ll need to schedule some time with the medical company that they use to complete the exam.

The exam usually involves a questionnaire, blood samples, height and weight measurements, and a request for medical records. It’s typically done at a time convenient for you, at your home, and is really quick.

I dreaded the exam portion of this process, but it ended up not being that bad. The examiner was very professional and it was over with quickly. It took about 2 weeks from the quote to get the exam performed.

Step 5: Turn in Your Life Insurance Application

The application is usually given to the exam company, who then passes it, along with exam results, to the insurance company’s underwriter, who decides on your insurance class. You may be given the option to pay for your policy at the exam and lock in your insurance. I opted not to do this and to wait to see the final price.

Step 6: Wait for the Insurance Underwriter

An underwriter is the person working for the insurance company who decides if they can insure you and how much it will cost to do it. They factor in as much information as they can about you. The biggest factors are obviously age and health.

There’s usually at least a 2 week wait from the time the exam is complete till the underwriter makes the determination.

Step 7: Pay Your Life Insurance Premium

Finally, when the underwriter is done, you’ll be sent your policy and information to make your payment. Once payment is received, you’re insured.

So that’s what you can expect when trying to get life insurance. It’s not an easy process. But I do feel strongly that it’s worth the hassle. I’m happy with the coverage I now have and I rest a bit easier knowing that my family has a bit of protection in the event something happens to me.

Have you purchased life insurance? Was your process similar? If you haven’t purchases it, what’s holding you back?

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Last Edited: January 31, 2017 @ 12:22 amThe content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.

About Philip Taylor

Philip Taylor, aka "PT", is a CPA, financial writer, podcaster, FinCon Founder, husband, and father of three. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or Google+. Listen to the new podcast, Masters of Money!

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Comments

Nice, simple article, PT. Helpful for many folks. I did disagree with one part though… Hiring an agent. You were correct, hiring an agent doesn’t cost any more. So why not get human help from someone you can call 24/7 for service or… The dreaded claim (hopefully not). Can you get all that with an online broker? Sure. But I can do my taxes with software, too… But I hire a real human (expert I can call anytime) for that. Life insurance agents (ones with a fiduciary mindset) are parallel in that regard. Plus, most agents are entrepreneurs… Why not support local business owners (round about). Just a thought. Again, great article! Tom

@PT Hello Craig. Great post but I’d like to offer a different point of view on your comment and several others that express the same general opinion that life insurance doesn’t make sense for a single, young adult with no kids Here’s an important fact about life insurance – the younger you are and the healthier you are, the less expensive life insurance coverage will be. As a healthy young person, you could lock in an incredibly inexpensive 30 year policy. The cost is guaranteed to never increase. To start with, you could name a friend, parent, or sibling as the beneficiary. If you eventually got married and/or had kids, you could change the beneficiary to your spouse or a child without ANY increase in the cost or having to go through the application process again. This gives you great flexibility for the future as well as incredibly affordable premiums. The best time to buy life insurance is always ASAP. For example, a 25 year old, non-smoking female can get 30 years of guaranteed coverage with a benefit of $250,000.00 for only $16.55 per month.

life cover is the first thing you should buy after a wedding band or if you make a commitment to someone you love. We all want our partners to be able to enjoy a reasonable standard of living if we’re no longer around. The thought raising a family on a single income, and childcare is frightening

About 48 Million Americans do not have Insurance which is a huge amount to look through and solve the issue of insurance , even though insurance is said to be started as soon as we start our first salaried job.

Philip: This is a great distillation of a process that a lot of people get lost in or intimidated by. One quick point: InsureMe.com is not actually a broker. They (like many, if not most of the big online sites) are just a lead generation site that tries to get your contact info and then sends it on to an agent who pays for the lead. They call it a ‘referral’ service. I always think it’s nice for people to know that there are a small number of online sites out there where they can research price without divulging their personal information or being treated like a lead in that way: coverpath.com (full disclosure: my company) and term4sale.com are two such sites.

I just saw this over on the Black Coffee. I like how you outlined buying life insurance like it’s not scary.. because it shouldn’t be. I also like how you went to a few different sources to compare life insurance quotes because no single agent knows all the answers for you. Of course, if you were able to compare multiple agents in one place, that would be nice too;)

Between term and whole life insurance, the sensible choice is term life insurance and investing the difference. This list will help people who are in the process of getting life insurance. Wish you had put it up a few years back, when I was shopping for my own policy 🙂

About PT

Hi, I'm Philip Taylor. I'm a husband, father, blogger, CPA, and entrepreneur. I love learning to do more with my money and sharing it all here with you. Join in on the conversation and start improving your financial life today. Read more...

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The content of ptmoney.com is for general information purposes only and does not constitute professional advice. Visitors to ptmoney.com should not act upon the content or information without first seeking appropriate professional advice.